Morning Update – 29/09/2017 – by Arjun Lakhanpal

Morning all.. Wall St managed to close in positive territory last night with the S&P up 0.12% but the Trump Tax reform euphoria weakened and saw US yields fell taking the dollar with them. In Asia we saw the Nikkei close down 0.15% as USDJPY slipped from above 113.00 to a low of 112.26 last night. Data from Japan was mixed.. Japan N’wide Overall CPI +0.7% y/y; Core CPI +0.7% in line; CPI excl fresh food/energy: +0.2% y/y vs +0.1% prev- Japan Aug Household Spending higher: +0.2% m/m vs -0.2% cons & +0.6% y/y vs +1.0% cons-Japan Aug Industrial Output beat: +2.1% m/m vs +1.9% cons-Japan Aug Retail Sales weaker: +1.7% y/y vs +2.6% cons.. BoJ Sept Meeting Summary of Opinions: best way to achieve price goal is to patiently maintain current easy policy; BoJ must be ready to take necessary action if geopolitical risks threaten to revive deflation; one board member saw need to stimulate demand by additional easing given scheduled sales tax hike in Oct ‘19 (likely newcomer Goushi Kataoka); chances of inflation accelerating to 2% next year is low. The FX market was muted overnight with some mild USD strengthening. NZD (our biggest mover overnight) continues to get hit by political uncertainty after the election outcome, 0.3% softer overnight. JPY, AUD and GBP were traded down 0.3-0.2% weaker against the USD. In other asset classes treasuries stabled from their most recent sell-off and oil pared back losses on Friday up 0.4% and floating above the $57 a barrel mark after 3 days of declines. Data this morning we get French Consumer spending and CPI from France and the EU. We get German and Norwegian unemployment and UK GDP for Q2 and mortgage approvals.. BoE Carney due to speak this morning and remember its month/quarter en which may distort things a bit. Good luck.